In a game of chance, the probability of winning a $50 prize is 40 per cent, and the probability of winning a $100 prize is 60 per cent. What is the expected value of a prize in the game?
A) $50
B) $75
C) $80
D) $100

Question

Quizplus · Accepted Answer

To calculate the expected value of the prize, we need to multiply each possible prize by its respective probability, then add the products.

Expected value = (Probability of winning $50 x $50) + (Probability of winning $100 x $100)
Expected value = (0.4 x $50) + (0.6 x $100)
Expected value = $20 + $60
Expected value = $80

Therefore, the expected value of the prize in the game is $80, making choice C the best answer.

In a Game of Chance, the Probability of Winning a $50